In 2009, the Egyptian National Competitive Council (ENCC), an Egyptian NGO, was assigned by the government to develop the country's National Competitiveness Strategy. To us, this was a sign that the government was finally ready to work with civil society and the private sector as partners in proactive moves towards greater integration. The ENCC contracted with a number of international experts and created a committee chaired by myself to draw up the strategy. While doing so, one of the projects that came to mind was the Suez Canal Corridor. This article is not so much about the “Competitiveness Strategy”, which I advise everyone to read, but about this extraordinary mega-project that captured our imagination at that time. The investment in the Suez Canal had been done, the brand had been created, yet the potential of the project had never been achieved. The revenue of $4 billion could have been increased more than tenfold had Egypt created a different vision for the canal and allowed multinational companies and the rest of the world to invest in it. This would have reduced their costs and improved their competitiveness, and Egypt would also have gained. The project, with its global vision, captured our imagination, and we decided to test how stakeholders perceived the vision. We worked in two directions, one via experts and professionals to prepare presentations about the project and draw up preliminary working documents, and the other via meeting many of the stakeholders. I organised seven meetings in 2009-2010, each having around 25 invitees from different backgrounds, including business, the military, diplomacy, the media, the engineering community and others. Some of the meetings were with business associations and chambers of commerce. The objective was to see if the project could capture their imaginations and stimulate them in a way similar to what had happened with us. We wanted to collect all the stakeholders' responses so as to be ready to answer all the possible questions that could cross the mind of society as a whole. As much as we wanted investors to be excited about the project, it was important to work on marketing it at a national level and to test people's ability to feel national pride in such a mega-project that could improve the economy and create employment. The Suez Canal area is the least congested area in Egypt. It has the highest level of human development of all the governorates of Egypt. As this area was under the control of the military for decades, it has the fewest problems of land ownership and obstacles to develop it. This mega-project could be the door for the development of Sinai, which has been hindered for years. I did three TV interviews about the project and received dozens of documents about the canal and copies of studies done by local and international organisations for its development. Many individuals of great knowledge and with a passion for the project gave me their insights, time and contributions. It was clear to me that innovation does not only mean new ideas. Having a new vision of an existing project can be creative and innovative too. Egypt, today more than ever, has to modernise and create a more dynamic, efficient and competitive economy. The ownership of such an important route and collecting tolls from it is not enough to secure and enhance the future of the canal or the country. Egypt must grab a larger share of international trade and transport-related business by establishing greater added value from the world's main trade highway, the Suez Canal. Egypt's new integrated transportation, logistics, transformation and services corridor can raise the bar for competitors, lessening bypass potential and loss of revenue. It is my conviction that the national objectives of the Suez Canal Corridor should be to strengthen the bonds of the industrial and commercial relations of the Canal Zone and Sinai with neighbouring countries in the Arab region, the Middle East and the Mediterranean Basin. In addition, local objectives should aim to establish a large number of industrial and free zones equipped with services and facilities, not only along the canal but also in other geographically connected free zones in Rafah, Al-Arish and North Sinai. Egypt can achieve its potential and stimulate its national purpose and pride as an economic powerhouse driving regional development via this new vision of an old project.
WAYS FORWARD: To achieve this, the first goal should be to act positively in the geo-political dynamics of the region, along with being an example for regional development and gaining a security dividend in terms of the interest of the international community. The second goal should be to have a positive impact on the efficiency of global trade and boost Egypt's global influence and goodwill. The third goal should be to focus on labour-intensive projects that have the potential for growth and strengthen the region's capacity to increase employment. The fourth should be to depend on a number of sites as centres of industrial growth led by the cities of Port Said, Ismailia and Suez, and possibly creating two more new cities. The fifth goal should be to boost industrial activities with comparative advantages such as industries and services based on the exploitation of natural gas and mineral wealth. The sixth goal should be to create new tourist destinations along one of the most beautiful areas in Egypt, the 170 km of the canal with its amazing lakes and excellent weather. The Suez Economic Corridor Project, as I see it, is an exciting and realistic one that can lead to creating a fully integrated system of trade, industry, transport, logistics and technology within a special and dynamic region made up of ports, railways, airports and manufacturing clusters. Using a global brand, the Suez brand, the corridor can and should be able to attract public and private investment to a highly competitive and trade-focused region and establish Egypt as a world-class destination for investment and a logistics hub to service the European, Asian and African markets. The corridor would be comprised of several key “pillars” that would support the various trade and technology clusters. These would include setting up industries as corner stones to establish the project's birth as a medium-term strategy, during which the project would achieve operational priorities in response to evolving conditions. These industries should include the shipping industry, which comes first to mind, including many functions like maintenance, dry docks, repair, refitting, crews, cruise ships, shipping support, catering, etc. The logistics industry to be created in the project includes intermodal and electronic data interchange (EDI), container terminals and train services, roll-on, roll-off containers and rail links for Egypt and the region, improved transit and facilitation, including customs services for the MENA region and the landlocked African countries, and the facilitation of Asian-European trade. Sinai is a virgin natural resource area where related industries would add value, particularly for mining. The development of the project would stimulate natural resource investments in Africa and the Sahel, which would help develop and incubate green energy investments with Egyptian and foreign partners in the solar, biofuel, and renewable energy investment and research industries. Technology parks and manufacturing businesses would not be stifled by the logistical challenges of Cairo, and the Suez Corridor would attract businesses and employees that want to be close to the action, working in the dynamic Canal Zone area within hours of major markets and cities. As Egypt is in the centre of the world and has a leadership role in the Middle East and Africa, the global supply chain industry would be a flourishing one. The Suez Canal Corridor could and would demonstrate its ability to be the economic leader of the MENA region, based on a modern vision for the future and one that is outwardly focused and embraces the assets and advantages that make Egypt unique. The longer-term strategy should identify the metrics that enable the Suez Canal Corridor to be effective and sustainable in confirming the project's success. This would happen through the integrated development of the infrastructure of the major cities along the canal, including airports, multiple ports along the 170 kms of the canal, railways, world-class roads and places of interest. Major cities are the cornerstones guaranteeing housing near places of employment, and this leads to the need to create extensions of the three major cities around the canal. Establishing airports to accommodate the expected trade will also be necessary. Other supporting ports should be built using the latest technology and up to par with other international ports in order to adapt to international working standards and facilitating regional and international cooperation. Railway lines will need to have enormous capacity to transport goods at low cost between the corridor and other governorates, as well as other countries. There will also need to be a world-class road network to link the components of the project and complete the interconnected network. The canal also carries huge potential for developing places of interest for tourism and recreation, which can contribute to attracting new investments. The preliminary revenue model for the project is based on a combination of tangible and intangible economic scenarios. Over time, the project will generate billions of dollars of direct and indirect capital flows through the increased generation of user fees, corporate taxes, property taxes and associated revenues. However, the benefits to private investors will be even more substantial. Local and international investors, including many leading global brands, will create new value, as well as millions of jobs, by successfully building, growing, and managing a successful economic corridor and trade hub project. The prerequisites strategy to develop the project as a whole will depend upon the availability of unencumbered ground space and a unifying vision between institutions and various government agencies. These conditions will increase production capacity, education, training and innovation through the development of human resources, the integration of infrastructure elements that have been previously displayed at all levels of services depending on the factors that explain the added value, and boost competitiveness to increase the liberalisation of Egyptian trade and industry and enable real competition. A PHASED APPROACH: The Egyptian National Competitive Council has proposed an implementation approach for this mega-project in a phased framework as part of a medium- and long-term strategy for one of the world's most important waterways. This framework includes Phase 1, exploratory and scoping opportunities; Phase 2, governance and stakeholders; Phase 3, marketing and target concepts; and Phase 4, implementation phase. Phase one, exploration and scoping opportunities, depends on pre-feasibility studies, including diligence reports that will help potential entrepreneurs identify projects for investment. It should provide comprehensive information for investment opportunities in the form of business-specific information regarding different business areas like marketing, technical, and industrial information. These factors will facilitate existing entrepreneurs in improving their existing set-ups and project investment information and financial projections to support the viability of their businesses. It is our view that a project of this magnitude should be handled away from the government bureaucracy and with a freedom of implementation that is immune to the fighting over territory that can arise between government agencies and ministries. All stakeholders should be invited to express their views, and hence there should be a clear vision and commitment nationally and internationally. Assigning resources and an accurate timeframe for project pre-feasibility with determination of market demand and needs should be available. Meeting the expectations of current and potential users, together with defining their and stakeholder benefits and potential return on investment, is essential. This is a project with risks and expected bottlenecks in implementation that has to be defined with imagination after studying similar situations and the creation of solutions. The vision and the pre-feasibility studies should include the proper establishment of the future availability of land, workforce and infrastructure, estimates of the needed investment and resources necessary to realise full potential, and funding options with the emphasis on private or private-public partnerships. Obtaining needed information about the logistics infrastructure of the site and getting all the needed information packaged in a usable document that can provide any investment group with a preliminary project proposal concerning profits and losses will help invite serious investment to the project. It is understood that possible schedules and the total project concept will be available. Gaining insights on the government officials who will be concerned with the project is something that needs to be not only clarified but also managed by a higher authority so as not to let government agencies create obstacles to implementation. In phase two, the corridor will undergo a “quantum leap” in competitiveness by helping to speed up the pace of internationalisation undergone by Egyptian industry in terms of exports, presenting opportunities for rearward linkages to existing industry (feeder industries and sub-suppliers and facilitating the reorganisation of industry) along cluster, ethical employment and alternative clean energy lines. The strategy needs leadership that can endorse the image of the cnal as a “national champion” and governance that can buy in key stakeholders. A steering group/commission regulatory regime with transparent and balanced effective guidelines should be established. In phase three, the marketing targets of the Suez Corridor project should concentrate on the promotion and distribution of its products and services, making them easier and more cost-effective. Before launching a marketing campaign, Egypt needs to focus on all related marketing concepts. Phase four will focus on the implementation of the planning, analysis, design, development and evaluation processes of the project. It should involve making sure that all functioning systems are in place. Implementing and maintaining a fully operational project requires functional support from a variety of areas. Personnel and processes are needed to manage, administer, support and deliver. The operational stage requires continuous support and maintenance to ensure that it works effectively and cost-efficiently, producing learners who meet necessary employment performance requirements.
KEY FACTORS: The key development activities of this project, in our opinion, are the holistic vision and comprehensive master plan, the master resource mobilisation, the institution building and coordination and the developing and unified regulatory regime. There is a need for properly built physical infrastructure, a concentration on human capital, and ongoing product development. The main benefits of the Suez Canal Corridor will also surpass the calculated economic value. Practically, it will transform Egypt into an important world transport and logistics centre, developing its transit, logistics, assembly and distribution potential and placing it between the producing nations of the East and the consuming nations of the West. It will capitalise on current market trends such as the neighbourhood effect, multi-modal transportation, industry clustering, value/supply chain integration, just-in-time (JIT) delivery, and the once-off, time-out opportunity of the Panama Canal. Placing factories closer to component suppliers and markets can create neighbourhood effects. Global supply chains are shrinking, and more goods are starting to be produced closer to home. This is driven primarily by the need to reduce transportation costs, because the environmental costs of far-flung supply chains and nearer neighbours can better facilitate JIT delivery than companies thousands of miles away. The Suez brand also provides a platform for the credible and effective promotion of Egyptian business through easier communications and greater national credibility, making it easier to sell other products such as foreign direct investment (FDI) in Egypt. It creates the ultimate proposition for investing in Egypt, replacing previous incentives and cheap labour. If presented and communicated effectively, the corridor will trigger major participation by the private sector. Egypt can move ahead of the curve in the competition for FDI by leveraging the concept to move up the investment and employment value chain. The concept and its associated global brand will be a mega-attractor, giving Egypt the edge in international investor competition. It will facilitate efforts to move from low-wage and environmentally injurious industries towards better-quality jobs and cleaner businesses, assisting the country's investment promotion programme to move from being the “taker of events” to the “maker of events” and from gravitation to attraction in terms of new FDI. The concept is large enough to be a forcing mechanism for sustained and accelerated national reforms. This is an economic powerhouse and an industrial growth pole. There will be a growth potential of an additional 15 to 20 per cent of GDP to the country over the long term. It will boost Egypt as a centre of power and influence in the region and ensure the Suez Canal realises its full national prosperity creation potential, not only for Egypt but also for the region as a whole and the rest of the world. The Suez Canal can provide an economic development frame and a vision for the next 30 years of national economic development in Egypt, and this in itself represents hope for future generations. Our message to the government of Egypt is that the Suez Canal strategy must focus on comprehensiveness and integration, which aim to develop the potential programmes in a manner that best serves the commercial, industrial and construction benchmarks of the project. There should be flexibility and adaptability, which aim to develop appropriate adjustments adapted to the requirements of the market and technological changes, and self-dependency, which aims to achieve maximum self-reliance for existing projects in service elements and indoor facilities to ensure efficiency and operational continuity. Finally, there should be profitability and productivity, which aim to increase financial returns and in the form of land and items available for sale and lease without prejudice to the environment. POSTSCRIPT (2015): Studies were done by many local and international agencies, visits were made, and experts from all over the world were involved. However, the project was still buried, once in 1996 and then again in 2004. In 2012, the Muslim Brotherhood government in Egypt took the project in a private direction that gave one state, Qatar, privileges over it and over Egypt. It was always the lack of patriotic vision, imagination and political will that handicapped the implementation of the project. Yet, this is a project that could and still can lift Egypt, providing inspiration for a better future and benefits to all stakeholders. I sometimes wonder why Egypt has kept on missing one valuable opportunity after another. It is my conviction that the current leadership of Egypt has the courage and popular support to implement this project. It is time for Egypt and the rest of the world to invest in the unique opportunity offered by the New Suez Canal. The writer is the founder and honourary chair of the ENCC.
